SFC Reprimands, Fines Interactive Brokers Hong Kong
- SFC said Interactive Brokers had been co-operative during its investigation.
Hong Kong’s Securities and Futures Commission (SFC) on Wednesday fined Interactive Brokers Hong Kong Limited, the arm of US brokerage Interactive Brokers (IB), HK
[gptAdvertisement]$4.5 million for internal control failures between 2015 and 2016.
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The commission also reprimanded the company for failing to have adequate internal controls in place to prevent its Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term of market orders from disrupting the market, and for a lack of documentation for its electronic trading systems.
In the investigation, the SFC found irregular price movement of two stocks, which shot higher by 48.7 percent and 126 percent in less than two minutes. The SFC and IBHK jointly hired an independent reviewer who discovered the company’s dealers caused the price spikes after they placed the entire orders volume to the market and “repeatedly submitting the unexecuted part of the order at the next available price until the entire order was completed.”
Other internal control failures included non-observance of Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term conditions when executing the market orders. Interactive Brokers also failed to comply with position limits on its derivatives trading and to follow the instruction to prevent its execution of orders from disrupting the market.
In reaching its decision, the SFC said Interactive Brokers had been co-operative during its investigation. Furthermore, the company agreed to engage an independent reviewer to conduct a forward-looking review of its internal controls to ensure compliance with the relevant regulatory requirements.
“Interactive Brokers Hong Kong has no disciplinary record in respect of the present failures,” the regulator said in its statement.
Hong Kong’s Securities and Futures Commission (SFC) on Wednesday fined Interactive Brokers Hong Kong Limited, the arm of US brokerage Interactive Brokers (IB), HK
[gptAdvertisement]$4.5 million for internal control failures between 2015 and 2016.
Discover credible partners and premium clients at China’s leading finance event!
The commission also reprimanded the company for failing to have adequate internal controls in place to prevent its Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term of market orders from disrupting the market, and for a lack of documentation for its electronic trading systems.
In the investigation, the SFC found irregular price movement of two stocks, which shot higher by 48.7 percent and 126 percent in less than two minutes. The SFC and IBHK jointly hired an independent reviewer who discovered the company’s dealers caused the price spikes after they placed the entire orders volume to the market and “repeatedly submitting the unexecuted part of the order at the next available price until the entire order was completed.”
Other internal control failures included non-observance of Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term conditions when executing the market orders. Interactive Brokers also failed to comply with position limits on its derivatives trading and to follow the instruction to prevent its execution of orders from disrupting the market.
In reaching its decision, the SFC said Interactive Brokers had been co-operative during its investigation. Furthermore, the company agreed to engage an independent reviewer to conduct a forward-looking review of its internal controls to ensure compliance with the relevant regulatory requirements.
“Interactive Brokers Hong Kong has no disciplinary record in respect of the present failures,” the regulator said in its statement.